Entertainment Industry Tax Credit Excludes Adult

PHOENIX — A new bill introduced in the Arizona Legislature would allow special income tax credits and exemptions for motion picture production companies, but would exclude those benefits from adult companies.

Senate bills 1346 and 1347, introduced in late January, are designed to bring Arizona up to speed with other southwestern states, including New Mexico, which enacted several tax exemptions and incentives during the end of 2002.

The New Mexican incentives encouraged massive growth in entertainment industry money spent within the state, raising it from $8 million during 2002 to roughly $80 million in 2003.

According to supporters within the senate, the Arizona bills would be a huge boon to the state’s current $21.9 million film industry, which contributed over $107 million in direct economic activity throughout the state during 2003.

“Any options to help the film business in Arizona are welcomed,” said Michele Regan, chair of the House Commerce Committee. “We are missing a big opportunity by letting films slip away from us and being shot in New Mexico or Nevada.”

However, on Thursday, the Senate Finance Committee amended both of the proposed statutes to prohibit “obscene” movies from taking advantage of the tax break.

According to the amendments referenced in the legislature’s record, the changes would “deny a certificate under this subsection for any production that would constitute an obscene motion picture film or obscene pictorial publication.”

The changes to the bill would deny adult companies the ability to receive a 10 percent credit on films that cost more than $100,000 to produce, 15 percent on films that cost more than $5 million to produce, and 20 percent on films that cost more than $10 million.

The exclusion of adult films from credits received by entertainment industry productions is consistent with similar laws enacted in Canada, where adult content is also excluded from receiving government subsidies.

New Mexico also includes similar limitations, prohibiting filmmakers that produce moves “harmful to children” from receiving a 15 percent entertainment industry tax credit.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Canadian Privacy Commissioner Endorses National AV Bill

Philippe Dufresne, privacy commissioner of Canada, has voiced support for a bill that would impose fines of up to $500,000 on adult sites that do not implement age verification for Canadian viewers.

Industry Attorney Paul Cambria Retires After 50 Years of Practicing Law

After more than a half-century in practice, during which he provided the defense in some of the adult industry's most notable legal cases, attorney Paul Cambria has retired.

FSC: California's Device-Based AV Law Does Not Apply to Adult

The Free Speech Coalition (FSC) put out an advisory today explaining that California's new device-based age verification law does not apply to adult websites.

Ohio AG Threatens Action Against 'Major' Adult Sites Over AV Law

Ohio Attorney General Dave Yost announced today that his office is sending "notice of violation" letters to 19 adult websites for failure to comply with the state's recently enacted age verification law.

Ukrainian Content Creators on Hook for Nearly $10M in Back Taxes

Content creators in Ukraine owe the equivalent of $9.3 million in back taxes, according to the country's State Tax Service.

Updated: European Patent Office Board of Appeals Revokes EIS GmbH Patent

The European Patent Office (EPO) Board of Appeals last week ruled in favor of pleasure brand LELO in the company's ongoing dispute with Satisfyer parent company EIS GmbH.

Update: Pornhub Will Not Block Ohio, Despite AV Law

Pornhub parent company Aylo will not block access to its websites in Ohio, despite new state age verification rules that came into effect Sept. 30.

Judge Dismisses Some Claims in 'Children of Pornhub' Trafficking Suit

A United States district judge on Friday dismissed some but not all claims against Aylo in a long-running case involving CSAM allegations featured in the influential 2020 New York Times article “The Children of Pornhub.”

Arcom to Expand AV Enforcement to Smaller Adult Sites

The president of French media regulator Arcom revealed on Thursday that the agency plans to escalate its enforcement of age verification rules to include smaller adult sites, starting in late 2025 or early 2026.

Pornhub to Shut Down Access in Arizona Over Age Verification

Aylo will geoblock Pornhub across Arizona starting Sept. 26, when the state’s age verification law, HB 2112, goes into effect.

Show More